Empire of Oil: Capitalist Dispossession and the Scramble for Africa Michael Watts1 Blood may be thicker than

water, but oil is thicker than both, - Perry Anderson, New Left Review, 10, 2001, p.30. In his 2006 State of the Union address, George Bush finally put into words what all previous Presidents could not bring themselves to utter in public. Addiction. The US, he conceded, is addicted to oil which is to say addicted to the car and as a consequence unhealthily dependent upon Middle East suppliers. What he neglected to mention was that the post-WWII US global oil acquisition strategy as Michael Klare (2004) calls it a central plank of US foreign policy since President Roosevelt met King Saud of Saudi Arabia and cobbled together their special relationship aboard the USS Quincy in February 1945 is in a total shambles. The pillars of that policy Iran, Saudi Arabia and the Gulf oil states, and Venezuela are hardly supplicant sheep within the US imperial fold. Fifty years of a special relationship with the Saud family, after all, brought September 11th. With surplus capacity in OPEC at an all time low and speculation running rampant in the commodity exchanges, Big Oil conversely is awash with money. Corporate profits are historically unprecedented. Chevron netted a cool $14 billion in 2005, and first quarter earnings in 2006 are 50% higher than the previous year, an historic high obscene enough to have Congress muttering about a windfall profits tax. So-called supply risks in Iran, Venezuela and Nigeria coupled with the speculative impulses of the oil traders have driven up the price of oil to around $70 a barrel, and a former oil-man (surrounded by a posse of other former oil men) stalk the halls of the White House. As if that were not enough, the New York Times (March 27th 2006, p.1) reports that through a vague law the US government will waive, for the oil supermajors, about $7 billion in state royalties over the next seven years. All of this, as Toby Shelley (2005) reminds us in his new book Oil, takes us back to the 1973 oil embargo and President Nixons Project Independence designed to achieve US self sufficiency by 1980 (for the record US dependency upon imported oil in the late 1960s was 20% and is expected to be about 66% by 2025). The policy failed miserably, and Nixon resorted to maximizing domestic supply and turning to reliable foreign suppliers at minimal cost - just as George Bush intends to do (Oil, p.117). It is no surprise, then, that alternative sources of oil-supply should be very much on the Bush radar screen (since conservation strategies or increased gas taxes are conspicuously absent). Cheneys National Energy Strategy Report in 2001 bemoaned US
1

Director of the Centre for African Studies, University of California, Berkeley.

oil habit a dependency on foreign powers that do not have Americas interests at heart - long before the State of the Union address. A recent report in the Financial Times headline (March 1st 2006) makes the new agenda crystal clear. If Africa is not as well endowed in hydrocarbons (both oil and gas) as the Gulf states, nevertheless the continent is all set to balance power, and as a consequence is the subject of fierce competition by energy companies (ibid., p.1). IHS Energy one of the oil industrys major consulting companies expects African oil production, especially along the Atlantic littoral, to attract huge exploration investment contributing over 30% of world liquid hydrocarbon production by 2010. Over the last five years when new oilfield discoveries were a scarce commodity, Africa contributed one in every four barrels of new petroleum discovered outside of Northern America. As the Catholic Relief Services put it in their exemplary study of oil geopolitics, The Bottom of the Barrel, (Gary and Karl 2003), a new scramble is in the making [See Figure 1. The battleground consists of the rich African oilfields the continents copious reserves of natural gas and its sweet light oil (ibid., p.1). Energy security is the name of the game. No surprise, then, that the Council of Foreign Relations call for a different US approach to Africa in its new report More than Humanitarianism (2005), turns on Africas growing strategic importance for US policy (p.xiv). It is the West African Gulf of Guinea, encompassing the rich on and off shore fields stretching from Nigeria to Angola, that represents a key plank in Bushs alternative to the increasingly volatile and unpredictable oil-states of the Persian Gulf. Nigeria and Angola alone account for nearly 4 million bpd (almost half of Africas output) and US oil companies alone have invested more than $40 billion in the region over the last decade (and another $30 billion expected between 2005 and 2010). Oil investment now represents over 50% of all foreign direct investment in the continent (and over 60% of all FDI in the top four FDI recipient countries) and almost 90% of all cross-border mergers and acquisition activity since 2003 has been in the mining and petroleum sector (WIR 2005, 43). Strategic interest for the US certainly means cheap and reliable lowsulphur (sweet) oil imports but also keeping the Chinese (for example in Sudan) and South Koreans (for example in Nigeria) aggressive new actors in the African oil business and Islamic terror at bay (Africa is, according to the intelligence community, the new frontier in the fight against revolutionary Islam). Energy security, it turns out, is a terrifying hybrid of the old and the new: primitive accumulation and American militarism coupled to the war on terror (Harvey 2003; RETORT 2005; Barnes 2005). The Road to Serfdom The backdrop to the new scramble is the calamity of African poverty or to deploy the language of the Report of The Commission on Africa (2005) assembled by Tony Blair and Gordon Brown, the greatest tragedy of our time. 2005 was dubbed the Year of Africa. In June of that year the Live 8 concerts drew a 2 billion global audience, and a week later the G8 pledged to double aid to Africa ($25 billion by 2010) and forgive the debts of fourteen African states. African poverty had forced itself into the international limelight aided and abetted by a motley crew of humanitarians from Bono to Jeffrey Sachs to the Pope. The Millennium Declaration in 2000, Bushs Millennium Challenge Account and the Emergency Plan for AIDS Relief (PEPFAR), the African Growth And

Opportunity Act, and now the new World Bank African Action Plan, we can now see, are the milestones in the growing international visibility of the African crisis. Collectively these palliatives were belated responses to the unacceptable face of two decades and more of globalization, reform and the search for the Holy Grail of good governance. On the continent itself, the New Economic Partnership for African Development [NEPAD] (2001) and the revamped African Union (formerly the Organization for African Unity) offered the prospect that poor leadership (the pathologies of the African postcolonial state variously described as patrimonialism, prebendalism, predation, quasi-statehood, the postcolony, politics of the belly) were to be taken seriously by an African political class that purportedly represented a new sort Figure 1.

Source: Ian Gary and Terry Karl, Bottom of the Barrel, Africas Oil Boom and the Poor, Catholic relief Services, 2003, p.43. of democratic dispensation unleashed by a raft of the political transitions during the 1990s. To see the African crisis, however, as a moral for ethical failure on the part of the international community (not least in its failure to meet the pledges promised to the Millennium Development goals of reducing poverty by half by 2015) is only a partial truth. The real crisis of Africa is that after 25 years of brutal neoliberal reform, and savage World Bank structural adjustment and IMF stabilization, African development has

failed catastrophically. William Easterly (2006), former high ranking World Bank apparatchik, in his new lacerating demolition of structural adjustment a quarter century of economic failure and political chaos (cited on his website: http://www.nyu.edu/fas/institute/dri/Easterly/ ) - boldly states that the entire unaccountable enterprise of planned reform is absurd. It was Africa after all that was the testing ground for the Hayekian counter-revolution that swept through development economic in the 1970s. It began with the Berg report in 1980 which was the first systematic attempt to take the Chicago Boys experience in post-Allende Chile on some readings the birth of neo-liberalism (Harvey 2005) and impose it on an entire continent. The ideas of Elliot Berg and his fellow travelers marked the triumph of a long-march by the likes of Peter Bauer, H.G.Johnson, and Deepak Lal (ably supported by the monetarist think tanks such as the Institute of Economic Affairs, the Mont Pelerin Society and the astonishing rise to power from the early presence of Leo Strauss and Fredrich Hayek of the Chicago School) through the development institutions like the World Bank. Long before shock therapy in eastern Europe or even the debt-driven adjustments in Latin America, it was sub Saharan Africa that was the playground for neo-liberalisms assault on the over extended public sector, excessive physical capital formation, and the proliferation of market distortions (Toye, 1987, pp.48-49). According to the UN, 26 of 32 sub-Saharan states had a liberal economic regime by 1998. Almost all had experienced some sort of structural adjustment program in the wake of the famous Berg Report launched by the World Bank in 1980 which (long before the Harvard Boys imposed shock therapy on the emerging markets of post socialism). If the 1980s was Africas Lost Decade collapsing commodity prices, deteriorating terms of trade and the first crashing waves of IMF austerity - then how might one characterize the last fifteen years - a long decade in which the benefits of reform were to be finally felt - in which life expectancy across subs Saharan Africa has steadily fallen and per capita income has at best stagnated? And all of this during a period in which net official ODA fell by 40% (from $18.7 to $10 billion). African will achieve its Millennium Goals of universal primary education and a 50% reduction in poverty by the middle of the next century (2150). In Africa, the court of neoliberalism has been concluded, and the verdict is in. The picture is not pretty. Over the last thirty years there has been no growth in income for the average African. Life expectancy is 46 years. Twenty-three of 47 sub Saharan states have currently a GDP of less than $3 billion (Exon-Mobils net profit in the first quarter of 2006 was $8 billion). By 2005, 38 of the top 59 priority countries that failed to make headway toward the Millennium Goals were sub Saharan states and according to the 2005 Chronic Poverty Report, all 16 of the most desperately derived countries are located in sub-Saharan Africa. Over 300 million people live on less than $2 per day and this is expected to rise to 400 million by 2015. One third of the population of the continent is undernourished (Benson 2004); stunting rates run at almost 40%. According to a UNFAO assessment in January 2006, 27 countries are in need of emergency food relief. As I write, the famine in Somalia is of the order of the catastrophic food crisis that devastated the region in the mid-1980s; the nightmare in Darfur has spread to Chad with the prospects of hundreds of thousands of refugees

being pushed and shoved across the greater Chad basin in a way all too familiar to the central African crisis a decade earlier. The neoliberal tsunami broke with particular ferocity of African cities, and the African slum world in particular. Reform the privatization of public utilities creating massive corporate profits and a decline in service provision, the slashing of urban services, the immiseration of many sectors of the public workforce, the collapse of manufactures and real wages, and often the disappearance of the middle class - was, as Mike Davis (2006) notes, remorselessly anti-urban in its effects. As a consequence, African cities confronted the horrifying realities of economic contraction of 2-5% per year and sustained population growth of up to 10% per annum (Zimbabwes urban labor market grew by 300,000 per year in the 1990s while urban employment grew by just 3% of that figure). In Dar es Salaam public service expenditures per capital fell by ten per cent year in the 1980s; in Khartoum adjustment created 1 million new poor; urban poverty in Nigeria almost tripled between 1980 and the mid 19990s. No wonder that 85% of urban growth in Nairobi, Kinshasha or Nouakchott in the 1980s and 1990s was accommodated in the slums barracks of sprawling and ungovernable cities. Everyones worst urban nightmare Lagos grew from 300, 000 to 13 million in over fifty years but it will be part of a vast Gulf of Guinea slum expected to accommodation 60 million poor along a littoral corridor 600 kms stretching from Benin City to Accra by 2020. Black Africa will contain 332 million slum dwellers by 2015, a figure expected to double every fifteen years (Davis 2006, p.19). The pillaging and privatization of the state whatever its African pathologies and the African commons is the most extraordinary spectacle of primitive accumulation by dispossession, all made in the name of foreign assistance (Harvey 2005). The involution of the African city has as its corollary not an insurgent lumpenproletariat but as Davis himself laconically admits the rise of Mohammed and the Holy Ghost, a vast political universe of Islamism and Pentecostalism. It is this occult world of invisible powers whether populist Islam in Kano or witchcraft in Soweto (Ashforth 2005) that represents the most compelling ideological legacy of neoliberal utopianism in Africa. As if to confirm the catastrophism of commentators like Robert Kaplan, the calamity that is African development ran straight into another: the HIV/AIDS epidemic. While new epidemiological data suggests that the prevalence rates and possible demographic and socio-economic impacts for much of Western and northeastern Africa may have been exaggerated (Guardian, April 21st 2006, p.29), the pall that the disease has imposed on some regions is incontestable. The impact of HIV/AIDS with an 8% adult prevalence and 28 million infected, Africa accounts for 2.3 million AIDS deaths per year has transformed life expectancy in southern and eastern Africa. Twenty years ago, a male child could reasonably expect to live to 60 in Botswana; currently it is about 30. By 2010 there will be more than 50 million orphans in Africa. Of course, there are those within the development business for whom the failure of secular nationalist development is a result not of too much neoliberalism, but not enough. The complaint here, typically from those within the free-market establishment, is that adjustment and stabilization has never really been implemented (a right-wing version of the left-wing claim that adjustment was asking African ruling classes to

commit political suicide). SAPs were simply vetriloquism in which, as van de Walle (cited in Easterly 2005, p.146) sees it, the IMF/IBRD had given up trying to get African governments to do things but simply want to be told what governments might do to get a loan. There is, of course, some truth to this (but the cry of any planned failure will always be we were defeated by not going far enough). David Harvey (2005) has described the radically uneven geographical patterns of neoliberal governance and rule. Yet he makes the point that within this complexity is a universal tendency to increase social inequality and expose the poor top austerity and marginalization. And the reality is that Bank reforms, and the pressures imposed by the WTO from the mid 1990s onwards, in Africa did have drastic consequences for trade and investment the litmus test of neoliberal development seen in the widespread dismantling of state marketing boards and of trade protections. And here the picture is devastating. In absolute terms African exports grew quite rapidly from 1963-2000, but at a much slower rate that for world trade generally. Africas share of world exports fell from almost 6% in 1962 to 2% in 2000. In non-oil products (food and manufactures) growth rates of exports between 1980 and 1998 were miserable. Rodrik (1999) argues that given African conditions (income, geography, socioeconomic conditions), the performance is average. Yet it is incontestable that African exports are characterized overall by a disintegration from Northern markets and isolation from more dynamic developments in the composition of international trade (Gibbon and Ponte, 2005, p.44). UNCTAD showed that of the exports from 26 African states, the average concentration on primary exports has remained basically unchanged (roughly 85%) since 1980. In all categories, sub Saharan Africa has failed to move up the value-added chain away from primary commodities. What is especially striking is that the fears expressed by Manuel Castells in his Network Society that Africa was largely marginal to the circuits of capitalist accumulation and global resource flows during the 1980s and might be marginalized further in some respects proved to be a massive understatement (Figure 2). It is almost shocking to Figure 2. FDI Inflows to Africa ($billion) as share of fixed capital formation 1985-2004.

Source: World Investment Report, 2005, p.40. think that in the 1970s, Africa accounted for 25% of foreign direct investment (FDI) to the Third World. By 2000 it had crashed to 3.8% (Africas share of world FDI is currently less than 1%). Over the period 1981-1985, FDI inflow into Africa was running at $1.7 billion per annum; by 1991-1995 it had grown to $3.8 billion (Asiedu 2005; WIR 2005). Yet as a percentage of all developing country FDI inflow, the figure represented a secular decline from 9% to less than 5% (all-in-all miniscule compared to South and East Asia and Latin America). Between 1995 and 2001, FDI inflow amounted to $7 billion per year2 but almost two thirds of the portfolio was destined for three countries (Angola, Nigeria and South Africa, in which oil FDI accounted for 90% of all FDI inflow, see Figure 3). Half of Africas states had effectively none. Two thirds of FDI was derived from the same three countries (UK, Germany and the US) that had dominated FDI supply in 1980. According to the World Investment Report (2005), FDI into Africa is currently $18 billion; four countries account for 50%, and the top ten almost three quarters. To put the matter starkly, the vast bulk of private transnational investment the hallmark of success for the neoliberal project - was monopolized by a quartet of mining-energy economies. The remainder of the continent was essentially Figure 3. FDI Inflows to Africa 2003-2004 (top ten countries)

Source: World Investment Report, 2005, p.41 insignificant. From the vantage point of the Year of Africa, the geography of investment capital flows suggests that Castells fears were radically underestimated. The African accumulation crisis, and the dynamics of capital and trade flows, are in practice complex and uneven (Hart 2003). In addition to oil (and the very few cases of
2

Between 1995 and 2004 FDI per capita doubled from $8 to $20; total FDSI in US dollars doubled from 1990-2004 (World Investment Report 2005).

manufacturing growth in places like Mauritius which are simple national exportprocessing zones), the other source of economic dynamism is the (uneven) emergence of global value chains especially around high values agricultures (fresh fruits and vegetables) [Friedberg 2004, Gibbon and Ponte 2005] in South Africa, flowers in Kenya, green beans in Senegal, these forms of contract production, typically buyer-driven commodity chains in which retailer exert enormous power have created islands of agrarian capitalism but as Gibbon and Ponte show, they contribute to and deepen patterns of existing inequality across Africa and rest on concentrations of private economic power (p.160), which typically means non-African business elites. The deepening of commodification in the countryside driven in part by the dismantling of the marketing boards under neoliberalism - in tandem with demographic pressures (caused as much by civil war and displacement as high fertility regimes), has made land struggles and the dismantling of what remains of the African commons a vivid part of the new landscape of African development (Peters 2004; Woodhouse, Bernstein and Hulme 2000). It is no surprise that against this backdrop the development establishment flails around wildly. On the one side stands former World Bank economist William Easterly for who all aid (planning) has been a total (and unaccountable) failure. The solution is not to plan at all. Rather than planners (in his view the IMF/IBRD stenographers are really Stalinists in neoliberal garb) and the likes of Bono and Tony Blair we need to find a raft of searchers like Mohammed Yunus. On the other stands the one man industry otherwise known as Jeffrey Sachs who seeks to expand foreign aid - $30 billion a year for Africa and a new Global Compact by which the rich will help save the poor (2006, p. 329) who are as much hampered by poor physical geography as governance failure. In reality what is on offer is a bleak world of military neoliberalism. At one pole, enclaves of often militarily fortified accumulation (of which the oil complex is the paradigmatic case; see Ferguson 2006) and the violent, sometimes chaotic, markets so graphically depicted in the documentary film Darwins Nightmare. On the other are the black holes of recession, withdrawal and uneven commodification (Bernstein 2004). These complex trajectories of accumulation are dominated at this moment by the centrality of extraction and a return to primary commodity production. Petropolitics and The New African Gulf States Currently Africa is the centre of a major oil boom, an index of the centrality of the primary commodities sector as the most important source capitalist accumulation on the continent. The continent accounts for roughly 10% of world oil output and 9.3% of known reserves. Though oil fields in Africa are generally smaller and deeper than the Middle East - and production costs are accordingly 3-4 times higher - African crude is generally low in sulfur and attractive to US importers. As a commercial producer of petroleum, Africa arrived, however, rather late to the hydrocarbon age. Oil production in Africa began in Egypt in 1910 and only in earnest in Libya and Algeria (under French and Italian auspices) in the 1930s and 1940s. Now there are twelve major oil producers in Africa members of the African Petroleum Producers Association - dominated, in

rank order of output, by Nigeria, Algeria, Libya and Angola which collectively account for 85% of African output3. All of the major African oil producers are highly oildependent. Among the top six African oil states, petroleum accounts for between 75 and 95% of all oil export revenues, between 30-40% of GDP and between 50 and 80% of all government revenues4. Up until the 1970s North Africa dominated production of oil and gas on the continent but in the last three decades it has moved decisively to the Gulf of Guinea encompassing the rich on and off shore fields stretching from Nigeria to Angola (Hodges 2001; Frynas 2004; Yates 1996). The Gulf constituted by the socalled West African Gulf States - has emerged as the predominant African supplier to an increasing tight and volatile world oil market. The Washington DC think tanks and the phalanxes of oil lobbyists (CSIS 2004; CWC 2004) are deeply concerned with Gulf of Guinea security5, whether US interests are at risk and whether heightened US engagement is warranted (CSIS 2005:2)6. There are twelve major oil producers in Africa7 members of the African Petroleum Producers Association - dominated (in rank order of output) by Nigeria, Algeria, Libya and Angola which collectively account for 85% of African output. Gabon and Equatorial Guinea are the only African oil producers with high oil per capita (so called petroleum endowments), comparable to the oil rich and sparsely populated states such as Kuwait and Qatar. All of the major African oil producers are highly oil-dependent: for the top six African oil states, petroleum accounts for between 75 and 95% of all oil export revenues, between 30-40% of GDP and between 50 and 80% of all government revenues. Only Nigeria ranks within the worlds top fifteen oil producers (it currently ranks number 12). Nigeria, Algeria and Libya are respectively the worlds 8th, 10th and 12th largest oil exporters. These three states and Gabon are all members of OPEC. All African governments have organized their oil sectors through state oil companies that have some forms of collaborative venture with the major transnational oil companies (customarily operated through oil leases and joint memoranda of understanding). In general the international oil companies operating in Africa have production share arrangements with state oil companies (Nigeria is the exception which operates largely through joint ventures). African governments guarantee the companies
3 4

Nigeria, Algeria and Libya are respectively the worlds 8th, 10th and 12th largest oil exporters. Gabon and Equatorial Guinea are the only African oil producers with high oil per capita (so called petroleum endowments) comparable to the oil rich and sparsely populated Mid-East petro-states such as Kuwait and Qatar. 5 Coup attempts were launched against Equatorial Guinea, Sao Tome and Chad in 2004-2005; Gabon, Congo and Angola all face internal political instabilities and civil conflict. 6 The Petroleum Finance Company (PFC) acknowledged the enhanced significance of Nigerian oil in a March 2000 presentation to the US Congressional International Relations Committee Sub-Committee on Africa. By early 2002, the Jerusalem-based neo-con thinktank, the Institute for Advanced Strategic and Political Studies, was actively promoting Africa as a priority for US national security. 7 African gas production a by product of oil drilling - was close to 4 trillion cubic feet by 2000. Algeria produces almost 70%. Algeria and Nigeria account for the largest reserves of gas. African gas consumption is expected to grow substantially as domestic and transnational gas-to-power plants are developed and as major oil producers such as Nigeria and Angola developed their liquefied natural gas capacities (the majority of which is currently flared).

a minimum profit according to geological, technological and investment criteria. The country receives royalties through the national company of the quantity of crude produced after deductions are made to cover costs of the oil operations. All of these petro-states are marked by staggering corruption, authoritarian rule and miserable economic performance (the so-called resource curse). The deadly operations of the alliance between corporate oil and autocratic oil states, have partially forced the question of transparency of oil operations onto the international agenda. Tony Blairs Extractive Industries Transparency Initiative, the IMFs oil diagnostics program and the Soros Foundations Revenue Watch are all voluntary regulatory efforts to provide a veneer of respectability to a rank and turbulent industry (Zalik 2004; Gary and Karl 2003; Watts 2005). Nigeria: The Rise and Fall of an Oil State Nigeria is the jewel in the African oil crown. Nobody would doubt the strategic significance of contemporary Nigeria. One of every five Africans is a Nigerian - the countrys population is currently estimated to be 137 million - and it is the worlds seventh largest exporter of petroleum providing the U.S. market with roughly 8 percent of its imports. A longtime member of OPEC, Nigeria is an archetypical oil nation. With reserves estimated at close to forty billion barrels, oil accounted in 2004 for 80 percent of government revenues, 90 percent of foreign exchange earnings, 96 percent of export revenues according to the IMF, and almost half of GDP. Crude oil production runs currently at more than 2.1 million barrels per day valued at more than $20 billion at 2004 prices. Mostly lifted onshore from about 250 fields dotted across the Niger Delta, Nigerias oil sector now represents a vast domestic industrial infrastructure: more than three hundred oil fields, 5,284 wells, 7,000 kilometers of pipelines, ten export terminals, 275 flow stations, ten gas plants, four refineries (Warri, Port Harcourt I and II, and Kaduna), and a massive liquefied natural gas (LNG) project (in Bonny and Brass). The rise of Nigeria as a strategic player in the world of oil geopolitics has been dramatic and has occurred largely in the wake the civil war that ended in 1970. In the late 1950s petroleum products were insignificant, amounting to less than 2% of total exports. Between 1960 and 1973 oil output exploded from just over 5 million to over 600 million barrels. Government oil-revenues in turn accelerated from 66 million naira in 1970 to over 10 billion in 1980. A multi-billion dollar oil industry has, however, proved to be a little more than a nightmare. To inventory the achievements of Nigerian oil development is a salutary exercise: 85 percent of oil revenues accrue to 1 percent of the population; perhaps $100 billion of $400 billion in revenues since 1970 have simply gone missing (The anti-corruption chief Nuhu Ribadu, claimed that in 2003 70% of the countrys oil wealth was stolen or wasted; by 2005 it was only 40%). Over the period 1965-2004, the per capital income fell from $250 to $212; income distribution deteriorated markedly over the same period. Between 1970 and 2000 in Nigeria, the number of people subsisting on less than one dollar a day grew from 36 percent to more than 70 percent, from 19 million to a staggering 90 million. According to the IMF, oil did not seem to add to the standard of living and could have contributed to a

decline in the standard of living (Martin and Subramanian 2003:4). Over the last decade GDP per capita and life expectancy have, according to World Bank estimates, both fallen. What is on offer in the name of petro-development is the terrifying and catastrophic failure of secular nationalist development. It is sometimes hard to gasp the full consequences and depth of such a claim. From the vantage point of the Niger Deltabut no less from the vast slum worlds of Kano or Lagosdevelopment and oil wealth is a cruel joke. These paradoxes and contradictions of oil are nowhere greater than on the oilfields of the Niger Delta. In the oil rich states of Bayelsa and Delta there is one doctor for every 150,000 inhabitants. Oil has wrought only poverty, state violence and a dying ecosystem says Ike Okonta (2005). The governments presence, Okonta notes, is only felt in the form of the machine gun and jackboots (2005:206). It is no great surprise that a half century of neglect in the shadow of black gold has made for a combustible politics. All the while the democratic project initiated in 1999 appears ever more hollow. The nightmarish legacy of oil-politics must be traced back to the heady boom days of the 1970s. The boom detonated a huge influx of petro-dollars and launched an ambitious (and largely autocratic) state-led modernization program. Central to the operations of the new oil economy was the emergence of an oil complex that overlaps with, but is not identical to, the petro-state (Watts 2005). The latter is comprised of several key institutional elements: (i) a statutory monopoly over mineral exploitation, (ii) a nationalized (state) oil company that operates through joint ventures with oil majors who are granted territorial concessions (blocs), (iii) the security apparatuses of the state (often working in a complementary fashion with the private security forces of the companies) who ensure that costly investments are secured, (iv) the oil producing communities themselves within whose customary jurisdiction the wells are located, and (v) a political mechanism by which oil revenues are distributed. The oil revenue distribution question whether in a federal system like Nigeria or in an autocratic monarch like Saudi Arabia is an indispensable part of understanding the combustible politics of imperial oil. In Nigeria there are four key distribution mechanisms: the federal account (rents appropriated directly by the federal state), a state derivation principle (the right of each state to a proportion of the taxes that its inhabitants are assumed to have contributed to the federal exchequer), the Federation Account (or States Joint Account) which allocates revenue to the states on the basis of need, population and other criteria, and a Special Grants Account (which includes monies designated directly for the Niger Delta, for example through the notoriously corrupt Niger Delta Development Commission. Over time the derivation revenues have fallen (and thereby revenues directly controlled by the oil-rich Niger Delta states have shriveled) and the States Joint Account has grown vastly. In short, there has been a process of radical fiscal centralism in which the oil-producing states (composed of ethnic minorities) have lost and the non-oil producing ethnic majorities have gained - by fair means or foul.

Overlaid upon the Nigerian petro-state is, in turn, a volatile mix of forces that give shape to the oil complex. First, the geo-strategic interest in oil means that military and other forces are part of the local oil complex. Second, local and global civil society enters into the oil complex either through transnational advocacy groups concerned with human rights and the transparency of the entire oil sector, or through local social movements and NGOs fighting over the consequences of the oil industry and the accountability of the petro-state. Third, the transnational oil business the majors, the independents and the vast service industry are actively involved in the process of local development through community development, corporate social responsibility and stakeholder inclusion. Fourth, the inevitable struggle over oil wealth who controls and owns it, who has rights over it, and how the wealth is to be deployed and used inserts a panoply of local political forces (ethnic militias, para-militaries, separatist movements and so on) into the operations of the oil complex (the conditions in Colombia are an exemplary case). In some circumstances oil operations are the object of civil wars. Fifth, multilateral development agencies (the IMF and the IBRD) and financial corporations like the export credit agencies appear as key brokers in the construction and expansion of the energy sectors in oil-producing states (and latterly the multilaterals are pressured to become the enforcers of transparency among governments and oil companies). And not least, there is the relationship between oil and the shady world of drugs, illicit wealth (oil theft for example), mercenaries and the black economy. The oil complex is a sort of corporate enclave economy but also a centre of political and economic calculation that can only be understood through the operation of a set of local, national and transnational forces that can only be dubbed as imperial oil. The struggle for resource control that has taken centre stage over the last decade in Nigeria as the Niger Delta has become more ungovernable (precisely because the struggle has assumed a more militant cast) grows precisely from this mix of forces that constitute the oil complex. Imperial Oil: The Contradictions of US Oil Security Policy On this canvas of African oil security and the conspicuous failure of post-war US petropolicy, recent events in Nigeria, and most especially in the oil-producing Niger Delta have necessarily grabbed the headlines (and the attention of the oil markets). The walkout by political representatives from the oil producing region from a national confab on the distribution of oil revenues, the arrest of a Delta militant and insurgency leader on treason charges in late 2005, and a major escalation in violent attacks on oil installations in December 2005 and January-February 2006 by Ijaw militants including the taking of oil hostages by a largely unknown militant group MEND (the Movement for the Emancipation of the Niger Delta) have thrown into dramatic relief the fragility of the Nigerias oil economy. By early 2006, 630,000 barrels per day were compromised by political instability and attacks. But this turbulence must itself be placed on a larger historical landscape. Since the late 1990s, there has been a very substantial escalation of violence across the delta oil fields, accompanied by major attacks on oil facilities and civil violence among and between oil producing communities and the state security forces is endemic (it is estimated that more than one thousand people die each year from oilrelated violence).

Over the last decade, the Niger delta has become a region of insurrection (Ikelegbe 2001:463). An industry analysis prepared for the Nigerian National Petroleum Company (NNPC) and published in 2003 was entitled Back from the Brink and painted a gloomy risk audit for Big Oil (ClearWater 2003). A leaked report by Shell in the same year explicitly stated that their license to operate in Nigeria was in question. And with good reason. The national oil company (the Nigerian National petroleum Company [NNPC]) estimated that between 1998 (which marked the and 2003, there were four hundred vandalizations on company facilities each year (581 between January and September 2004), and oil losses amounted to $1 billion annually (NNPC 2004). The tactics and repertoires deployed against the companies have been various: demonstrations and blockades against oil facilities; occupations of flow stations and platforms; sabotage of pipelines; oil bunkering, or theft (from hot-tapping fuel lines to large-scale appropriation of crude from flow stations); litigation against the companies; hostage taking; and strikes. A large group of Ijaw women that occupied Chevron oil refineries near Warri in 2002, demanding company investments and jobs for indigenes (New York Times, August 13, 2002), reflected the tip of a vast political iceberg. Mounting communal violence in the following year resulted in many mortalities and widespread community destruction and dislocation around the Warri petroleum complex. Seven oil company employees were killed in March 2003, prompting all the major oil companies to withdraw staff, close down operations, and reduce output by more than 750,000 barrels per day (40 percent of national output). These events in turn provoked President Obasanjo to dispatch large troop deployment to the oil-producing creeks. Ijaw militants, struggling to get a cut of the illegal oil bunkering tradesome estimates suggest that this innovative form of oil theft siphons a staggering 15 percent of national production (WAC/SPDC 2004; see also www.legaloil.com)threatened to destroy eleven captured oil installations. In April 2004, another wave of violence erupted around oil installations (at the end of April, Shell lost production of up to 370,000 barrels per day, largely in the western delta), this time amid the presence of armed insurgencies, specifically two ethnic militias led by Ateke Tom (the Niger Delta Vigilante) and Alhaji Asari (the Niger Delta Peoples Volunteer Force), each driven, and partly funded, by oil monies (and specifically organised oil theft). Ten years after the hanging of Ken Saro-Wiwa and the militarization of the Ogoni oilfields little has changed. A new Amnesty Report (2005) entitled Ten Years On: Injustice and Violence Haunt the oil Delta, noted, conditions across the oilfields remain the same, only worse. Security forces still operate with impunity, the government has failed to protect communities in oil producing areas while providing security to the oil industry, and the oil companies themselves bear a share of the responsibility for the appalling misery and the political instability across the region. The new violence and instability is something of a watershed however. Among MENDs demands were the release of two Ijaw leaders of note, the Ijaw being the largest and most militant minority group in the Nigerian Delta. On January 29th these hostages were released unharmed although the Ijaw leaders in question remained under arrest in Abuja, the Nigerian Capital. By the first week in February MEND was calling for the international community to evacuate from the Niger Delta by February 12th, or face

violent attacks. Two weeks later MEND claimed responsibility for attacking a Federal naval vessel and for the kidnapping of 9 workers employed by the oil servicing company Willbros, apparently in retaliation for an attack by the Nigerian military on a community in the Western Delta. The Nigerian government claimed they had attacked barges involved in the contraband oil trade. MEND claimed a goal of cutting Nigerian output by 30%. Within the first three months of 2006 $1 billion in oil revenues had been lost and over 15 Nigerian military had been killed in the uprising (Mail and Guardian March 22 2006). The current crisis points to the fact that the oil-producing region in Nigeria now stands at the centre of Nigerian politics for four reasons. First, the efforts led by a number of Niger Delta states for resource control, in effect expanded access to and control over oil and oil revenues. Second, the struggle for self-determination of minority peoples in the region and the clamor for a sovereign national conference to rewrite the constitutional basis of the federation itself. Third, a crisis of rule in the region as a number of state, and local governments are rendered helpless by militant youth movements, growing insecurity and ugly intra-community, inter-ethnic and state violence which as the recent events point out can threaten the flow of oil and USs much vaunted energy security. And not least, the emergence of a South-South Alliance linking the hitherto excluded oil producing states (Akwa Ibom, Bayelsa, Cross River, Delta, Ondo and Rivers) in a bulwark against the ethnic majorities (the Hausa, the Yoruba and the Ibo) in the run up to the 2007 elections. Not surprisingly the deadly operations of corporate oil, autocratic petro-states and the violent potentialities of the oil complex have forced the question of transparency and accountability of oil operations onto the international agenda. Tony Blairs Extractive Industries Transparency Initiative, the IMFs oil diagnostics program and the Soros Foundations Revenue Watch are all (voluntary) efforts to provide a veneer of respectability to a rank and turbulent industry (see Christian Aid 2003; CSIS 2004; Global Witness 2004). But the real action lies elsewhere. The danger is that the ongoing US militarization of the region could amplify the presence of mercenaries and paramilitaries, creating conditions not unlike those in Colombia. In February 2006 Nigerias Vice President Atiku Abubakar unsuccessfully requested 200 patrol boats and a military package from the US. In turn, Nigeria appealed directly for China for military aid, citing that the United States was slow to support them in this area. The Financial Times (March 1st 2006, p.1) cited the Africa director at the Washington based Center for Strategic and International Studies, Stephen Morrison, to the effect that the Chinese are very competitive players and we have to come to terms with that. They are going to places that really do matter. The availability of arms to both government and insurgent groups, has democratized the access to the means of violence in the struggle for political power. In the run up to the 2007 elections the windfall oil revenues will, as in 1999 and 2003, fund all manner of political thuggery and the arming of political parties and local militants who will be expected to deliver votes and intimidate voters. The prospect of US militarization from the south to protect the oil fields, and from the north to control Islamic terror through the Pan Sahel Counter Terror Initiative, is a recipe for massive political violence. Nigeria

provides, in this sense, a microcosm of the new scramble for Africa under military neoliberalism and the war on terror. It might well be the next Iraq.

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